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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) MEDIA GENERAL ) BROADCASTING, INC. ) (Assignor) ) ) and ) File No. BALCT-970214IH ) ELLIS COMMUNICATIONS, INC. ) (Assignee) ) ) For Consent to the Assignment of the ) License for Television Station ) WTVR-TV, Richmond, Virginia ) ) and ) ) ELCOM OF GEORGIA, INC.) (Assignor) ) ) and ) File Nos. BALCT-970214IE-IG ) MEDIA GENERAL ) BROADCASTING, INC. ) (Assignee) ) ) For Consent to the Assignment of the ) Licenses for Television Stations ) WHLT(TV), Hattiesburg, Mississippi ) WJTV(TV), Jackson, Mississippi ) WSAV-TV, Savannah, Georgia ) MEMORANDUM OPINION AND ORDER Adopted: July 21, 1997 Released: July 23, 1997 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it for consideration the above-captioned unopposed application for consent to the assignment of the license for television station WTVR-TV, Channel 6, Richmond, Virginia, from Media General Broadcasting, Inc. ("MGBI") to Ellis Communications, Inc. ("Ellis"). Also under consideration are the above-captioned unopposed applications for consent to the assignment of the licenses for television stations WHLT(TV), Hattiesburg, Mississippi; WJTV(TV), Jackson, Mississippi; and WSAV-TV, Savannah, Georgia, from Elcom of Georgia, Inc. to MGBI. 2. The Grade B contour of WSAV-TV overlaps that of WCBD-TV, Charleston, South Carolina, licensed to Charleston Television, Inc., a wholly-owned subsidiary of MGBI's parent Media General, Inc. Common ownership of WSAV-TV and WCBD-TV would violate the Commission's duopoly rule, which prohibits the common ownership of stations with overlapping Grade B contours. See 47 C.F.R.  73.3555(b). For this reason, MGBI requests a permanent waiver of the duopoly rule or, in the alternative, a temporary duopoly waiver subject to the outcome of the Commission's ongoing local television ownership rulemaking proceeding. See Second Further Notice of Proposed Rule Making, FCC 96-438, released November 7, 1996 ("Second Further Notice"). Additionally, pursuant to Note 5 to Section 73.3555 of the Commission's Rules, which exempts "satellite" stations from the multiple ownership rules, MGBI requests Commission approval to continue the operation of station WHLT(TV) as a satellite of WJTV(TV). The WSAV-TV/WCBD-TV Duopoly Waiver Request 3. In support of its request, MGBI has submitted an engineering exhibit which shows that there is no Grade A contour overlap between WSAV-TV and WCBD-TV. According to MGBI's engineering statement, the Grade B overlap between WSAV-TV and WCBD-TV will encompass an area of 1,980 square miles and 97,662 individuals. This overlap constitutes 10.8% of the population and 21.9% of the area of WCBD-TV's Grade B contour and 12.8% of the population and 18% of the area of WSAV-TV's Grade B contour. MGBI argues that the overlap is comparable to the range that the Commission has permitted in previously approved waivers. See, e.g., NWCG Holdings Corp., DA 96-1852, released November 7, 1996 (granting waiver where the Grade B population overlap figures were 29.4% and 10.2%, and area overlap figures were 14.7% and 16.5%); Taft Broadcasting Partners, L.P., 7 FCC Rcd 2854, 2855 (1992) (granting waiver where the Grade B population overlap figures were 11.4% and 4.3%, and area overlap figures were 19.2% and 18.0%). 4. Next, MGBI maintains that the stations serve separate and distinct markets. WCBD-TV is in the Charleston, South Carolina Designated Market Area (DMA), ranked 108th in size, whereas WSAV-TV is in the Savannah, Georgia DMA, ranked 100th in size. Moreover, the stations are geographically divided: WCBD-TV is located northeast of Charleston, the heart of its DMA, and WSAV-TV is located to the southwest of Savannah, the heart of its DMA. MGBI also asserts that the two stations will not compete for advertisers. 5. Additionally, MGBI contends that the overlap area will remain well-served by a variety of media outlets. MGBI has submitted an engineering statement demonstrating that nine commercial television stations other than WCBD-TV and WSAV-TV provide Grade B or better service to the overlap area. Of these nine stations, two stations serve the entire overlap area and one station serves 70% of the overlap area. According to MGBI, there are also numerous other media outlets serving the overlap area, including 10 AM radio stations, 22 FM radio stations, two daily newspapers and 26 separate cable systems (owned by 14 different owners). MGBI further notes that it would own only two media outlets in the overlap area. 6. Lastly, MGBI pledges that WCBD-TV and WSAV-TV will be operated independently of one another. The stations will maintain separate staffs overseen by different general managers. Furthermore, they will not share job recruitment information, sales personnel, or office space, nor will they offer joint advertising rates. MGBI contends that the separate and distinct operation of the stations will minimize any detrimental effect on competition or diversity in the overlap area. See H & C Communications, Inc., 9 FCC Rcd 144, 146 (1993). 7. The television duopoly rule, 47 C.F.R.  73.3555(b), generally prohibits the common ownership of television stations whose Grade B contours overlap. The objective of the duopoly rule is to promote diversity in programming sources and viewpoints and to prevent an undue concentration of economic power by fostering economic competition in broadcasting. Multiple Ownership Rules, 22 FCC 2d 306, 307 (1970), recon. granted in part, 28 FCC 2d 662 (1971). In adopting the duopoly rule's fixed standard of a prohibited overlap of Grade B service contours, the Commission expressly acknowledged the need for "flexibility" in that rule's application, noting that waivers should be granted where rigid conformance to the rule would be "inappropriate." Multiple Ownership of Standard, FM and Television Broadcast Stations, 45 FCC 2d 1476, 1479 n. 12, recon. granted in part, 3 RR 2d 1554 (1964). 8. The Commission has undertaken a reexamination of its broadcast television ownership policies, including the duopoly rule. In January 1995, the Commission adopted a Notice of Proposed Rule Making which, inter alia, proposed a new analytical framework within which the Commission would evaluate the local television ownership rules and also proposed revisions to those rules, including the television duopoly rule. See Further Notice of Proposed Rule Making in MM Docket Nos. 91-221 and 87-8, 10 FCC Rcd 3524 (1995). During the pendency of that proceeding, Congress passed the Telecommunications Act of 1996. Section 202(c)(2) of the Act requires the Commission to "conduct a rule making proceeding to determine whether to retain, modify or eliminate its limitations on the number of television stations that a person or entity may own, operate, or control or have a cognizable interest in, within the same television market." Pub. L. No. 104-104,  202(c)(2), 110 Stat. 56 (1996). In response to these directives, and in order to update the record, the Commission released the Second Further Notice of Proposed Rule Making, FCC 96-438, released November 7, 1996 ("Second Further Notice"). In this Second Further Notice, the Commission tentatively concluded that common ownership of television stations located in separate DMAs should be permitted, provided that the Grade A contours of the stations to be commonly owned do not overlap. Further, the Commission stated that, during the pendency of the rulemaking proceeding, it would be inclined to grant waivers of the duopoly rule for stations complying with the proposed duopoly standard, conditioned on coming into compliance with the ultimate outcome in the rulemaking within six months of its conclusion. Second Further Notice at 57. The Commission also gave the staff delegated authority to act on applications seeking waivers consistent with this interim policy. 9. Given the clearly articulated policy in the Second Further Notice, we do not believe that an unconditional grant of MGBI's duopoly waiver is appropriate. See WHOA-TV, Inc., FCC 96- 458 at 12-13, 27 (released December 10, 1996). However, we believe that grant of MGBI's alternative request for a conditional waiver of the duopoly rule, subject to the outcome of the pending ownership rulemaking, is justified. The temporary common ownership of WSAV-TV and WCBD-TV would be consistent with the interim policy set forth in the Second Further Notice, as the stations are in separate DMAs and there is no Grade A to Grade A signal contour overlap. Moreover, our examination of the record presented here reveals nothing suggesting that the Commission's established interim policy is inapplicable in this case. The WHLT(TV) Continued Satellite Request 10. MGBI seeks to continue to operate WHLT(TV) as a satellite of WJTV(TV) after the proposed assignment of license. In Television Satellite Stations, 6 FCC Rcd 4212 (1991), the Commission established that all applicants seeking to transfer or assign satellite stations must justify continued satellite status by demonstrating compliance with the following three-part "presumptive" satellite exemption standard: (1) no City Grade contour overlap exists between the parent and the satellite; (2) the proposed satellite would provide service to an underserved area; and (3) no alternative operator is ready and able either to construct or to purchase and operate the satellite as a full-service station. Id. at 4212. Alternatively, an applicant may demonstrate that "other compelling circumstances" warrant continued satellite authorization. Id. at 4214. MGBI asserts that WHLT(TV) qualifies for the continued satellite exemption under the Commission's three-part presumptive standard. 11. With regard to the first criterion, MGBI has submitted an engineering study which demonstrates that the City Grade contours of WJTV(TV) and its satellite WHLT(TV) do not overlap. Thus, the proposed satellite operation meets the first component of the presumption. As to the second criterion, MGBI employs our "transmission test," under which a proposed satellite community of license is considered underserved if there are two or fewer full-service stations already licensed to it. Id. at 4215. Since WHLT(TV) is the only full-service television station licensed to Hattiesburg, the area is underserved, and MGBI thus satisfies this component of the presumption standard. 12. As to the third criterion, an applicant must demonstrate that no alternative operator is ready and able to construct or to purchase and operate the proposed satellite as a full-service, stand-alone station. In connection with the previous transfer of control of the corporate licensee of WHLT(TV) to Raycom Media, Inc. (see note 2, supra), Brian E. Cobb, an experienced broker of broadcast stations who is familiar with WHLT(TV) and WJTV(TV) and their respective markets, concluded that WHLT(TV) was not in a large enough community to have sufficient economic viability to survive as a stand-alone station, and that a viable buyer for WHLT(TV) did not exist. In a current statement submitted by MGBI, Mr. Cobb asserts that nothing has changed in the market that should alter the satellite status of station WHLT(TV). Mr. Cobb states that without satellite status, WHLT(TV) would not be financially able to compete with WDAM-TV, the dominant VHF facility in the market. Mr. Cobb further notes that a channel 18 allocation in Laurel remains unfulfilled, likely due to the fact that the market is small and another full power television station would have difficulty being competitive. In conclusion, Mr. Cobb doubts that there would be "any meaningful market" for WHLT(TV) as a stand-alone station. Based upon these representations, we are persuaded that the market remains substantially unchanged from the time of our determination approximately one year ago. MGBI has adequately demonstrated the unlikelihood of finding an alternative operator willing and able to operate WHLT(TV) as a full-service, stand-alone facility, and, thus, satisfies the remaining component of the presumptive satellite standard. Conclusion 13. Having determined that the applicants are qualified in all respects, we find that grant of the assignment applications filed by the parties will serve the public interest. 14. Accordingly, IT IS ORDERED, That the request by Media General Broadcasting, Inc. for operation of WHLT(TV), Hattiesburg, Mississippi, pursuant to the satellite exemption of Note 5 to 47 C.F.R.  73.3555, IS GRANTED. 15. IT IS FURTHER ORDERED, That the request for permanent waiver of the television duopoly rule, Section 73.3555(b) of the Commission's Rules, to permit the common ownership by Media General Broadcasting, Inc. of television stations WSAV-TV, Savannah, Georgia, and WCBD-TV, Charleston, South Carolina, IS DENIED. 16. IT IS FURTHER ORDERED, That the request by Media General Broadcasting, Inc. for conditional waiver of the duopoly rule IS GRANTED, subject to the outcome of the Commission's pending broadcast ownership rulemaking (MM Docket Nos. 91-221 and 87-8). Should divestiture be required as a result of that proceeding, the licensee is directed to file, within six months from the release of a final order in MM Docket Nos. 91-221 and 87-8, an application for Commission consent to dispose of such stations as would be necessary for Media General Broadcasting, Inc. to come into compliance with the rules as provided in the final order. 17. IT IS FURTHER ORDERED, That the applications for assignment of license for television station WTVR-TV, Richmond, Virginia, from Media General Broadcasting, Inc. to Ellis Communications, Inc. (BALCT-970214IH), and television stations WHLT(TV), Hattiesburg, Mississippi; WJTV(TV), Jackson, Mississippi; and WSAV-TV, Savannah, Georgia, from Elcom of Georgia, Inc. to Media General Broadcasting, Inc. (BALCT- 970214IE-IG), ARE GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau